Nick Hanauer’s memo to his fellow zillionaires is great fun. His basic message is that the federal government needs to substantially raise the minimum wage or zillionaires are going to get guillotined. But he’s really making the case that wages so low that they must be supplemented with food stamps and rent assistance and medicaid are not good for capitalists because people don’t have any money to shop.
He makes a few good arguments and analogies. Here’s one, contra Mitt Romney:
Which is why the fundamental law of capitalism must be: If workers have more money, businesses have more customers. Which makes middle-class consumers, not rich businesspeople like us, the true job creators. Which means a thriving middle class is the source of American prosperity, not a consequence of it. The middle class creates us rich people, not the other way around.
Here he talks some smack about his hometown of Seattle:
Most of you probably think that the $15 minimum wage in Seattle is an insane departure from rational policy that puts our economy at great risk. But in Seattle, our current minimum wage of $9.32 is already nearly 30 percent higher than the federal minimum wage. And has it ruined our economy yet? Well, trickle-downers, look at the data here: The two cities in the nation with the highest rate of job growth by small businesses are San Francisco and Seattle. Guess which cities have the highest minimum wage? San Francisco and Seattle. The fastest-growing big city in America? Seattle. Fifteen dollars isn’t a risky untried policy for us. It’s doubling down on the strategy that’s already allowing our city to kick your city’s ass.
This next part is so fucking true, as I’ve mentioned in discussing my experiences in less exotic areas populated by poor black people, like North Philadelphia and St. Petersburg.
So forget all that rhetoric about how America is great because of people like you and me and Steve Jobs. You know the truth even if you won’t admit it: If any of us had been born in Somalia or the Congo, all we’d be is some guy standing barefoot next to a dirt road selling fruit. It’s not that Somalia and Congo don’t have good entrepreneurs. It’s just that the best ones are selling their wares off crates by the side of the road because that’s all their customers can afford.
And his bottom line:
Capitalism, when well managed, is the greatest social technology ever invented to create prosperity in human societies. But capitalism left unchecked tends toward concentration and collapse. It can be managed either to benefit the few in the near term or the many in the long term. The work of democracies is to bend it to the latter. That is why investments in the middle class work. And tax breaks for rich people like us don’t. Balancing the power of workers and billionaires by raising the minimum wage isn’t bad for capitalism. It’s an indispensable tool smart capitalists use to make capitalism stable and sustainable. And no one has a bigger stake in that than zillionaires like us.
The skeptic in me says that people will be very slow to guillotine the zillionaires because they have just enough to distract themselves with entertainment. The internet, smart phones, video games and good old-fashioned television are great sheepifiers. But, then I remind myself that Nick Hanauer became a zillionaire by seeing the potential for internet commerce and investing in Amazon.com. Maybe he can see the future better than I can.